Casitas-B-lineage lymphoma protein-b (Cbl-b) is an adaptor protein and RING finger domain-type E3 ubiquitin (Ub) ligase, and has been shown to be important for the maintenance of a balance between immunity and tolerance. Previously, we demonstrated that CD28 costimulation potentiates TCR-induced Cbl-b ubiquitination and degradation, whereas CTLA-4-B7 interaction is required for Cbl-b re-expression. These observations indicate that CD28 and CTLA-4 tightly regulate Cbl-b expression which is critical for establishing the threshold for T cell activation and tolerance. In strong support of this notion, Cbl-b-/- T cells are resistant to anergy induction in vitro and in vivo. Indeed, Cbl-b-/- mice are highly susceptible to autoimmunity. Further studies reveal that Cbl-b not only down- regulates T cell activation, but also selectively inhibits T helper 2 (Th2) differentiation and allergic airway inflammation. Intriguingly, Cbl-b favors peripheral conversion of naove CD4? T cells into CD4???? Tregs (iTregs) in vitro. Although Cbl-b-/- CD4? naturally-occurring Tregs (nTregs) display normal suppressive activity in vitro, Cbl-b-/- CD4? effector T cells (Teffs) are resistant to regulation by nTregs which is possibly due to increased production of IL-4. At the molecular levels, Cbl-b selectively associates with Stat-6, an important transcription factor involved in Th2 cell differentiation, upon IL-4 ligation and may inhibit Th2 differentiation by targeting Stat-6 for degradation. These processes are heightened in the TCR signaling. Furthermore, Cbl-b facilitates iTreg generation by inhibiting PI3-K/Akt activation. Based upon the above data, we hypothesize that Cbl-b targets Stat-6 for ubiquitination and facilitate iTreg generation, thus inhibiting Th2 responses and allergic airway inflammation. To test this hypothesis, we will investigate: 1) whether Cbl-b inhibits Th2 responses by targeting Stat-6 for ubiquitination, thus suppressing alleric airway inflammation; and 2) whether and how Cbl-b regulates the development of iTregs in vivo, therefore modulating Th2 responses and allergic airway inflammation. The specific aims of this proposal will address fundamental question: how does Cbl-b regulate its target substrates/pathways related to its biological functions. A better understanding of cellular and molecular mechanisms of Cbl-b biological functions may lead to potential therapeutic approaches for autoimmune diseases and allergic asthma.